The Bull Market's 3 Biggest Threats, According to 2,000 Individual Investors

Given the rise of online investing and commission-free trading, institutional money is no longer the only big player in the market. Retail investors have become a force to be reckoned with. Many investors of all kinds now monitor sentiment among the retail crowd, which often trades much differently than institutions. Retail investors tend to invest on a longer-term basis and are more likely to buy the dip during a big sell-off.

According to The Motley Fool's 2026 Investor Outlook and Predictions Report, which surveyed 2,000 individual investors about a range of stock market topics, 58% of individual investors plan to buy more stocks in 2026, while 34% plan to hold stocks. Gen-Z and millennial investors are leaders in these categories.

That said, individual investors aren't naive to the risks prevalent in today's environment. Here are the three biggest risks the bull market currently faces, according to The Motley Fool's recent survey.

Recession, inflation, and the labor market

Topping the list of investor concerns were the risks of a recession and inflation, with 45% of respondents citing them as the biggest concerns for the bull market.

This isn't a huge surprise, either, as investors have been grappling with these concerns since the pandemic. When the Federal Reserve raised interest rates by over 500 basis points (5%) between 2022 and 2023, investors believed a recession was inevitable. Interest rates raise borrowing costs, which tends to have a chilling effect on the economy.

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Rapidly rising interest rates also led to the longest inverted yield curve in history, meaning that yields on some shorter-dated U.S. Treasury bills and bonds were higher than those on longer-dated ones. This has been a reliable recession indicator for decades. Now, the U.S. economy is far from out of the woods, and recent economic data suggests a recession could still be on the table.

Few economic topics in recent years have been discussed more than inflation. In 2022, the Consumer Price Index, which measures the prices of a basket of consumer goods and services, surged to 9%, triggering the Fed's intense rate-hiking campaign. Since then, inflation has retreated significantly, but remains above the Fed's 2% preferred target.

A government shutdown last year and President Donald Trump's tariffs have made it difficult for economists to determine where inflation really is and whether it's still clearly heading toward 2%. If inflation remains high and the unemployment rate increases as well, the economy could find itself dealing with stagflation, an economic scenario that is extraordinarily difficult to escape.

The main concern

Roughly 37% of survey respondents also cited a weakening labor market as a main concern, which ties into the risk of a recession. Although a recession technically has to do with gross domestic product (GDP), consumer spending makes up about 70% of total GDP.

In recent years, consumers have drained their savings and piled into debt, but a historically low unemployment rate has helped keep the good times rolling. Recent revisions by the U.S. Labor Department showed that the U.S. economy added only 181,000 jobs in 2025. Excluding years in which the economy tipped into a recession, 2025 marks the weakest year of hiring since 2003.

If unemployment rises, spending could dry up, leading to a recession.

Ultimately, the market has several potential tailwinds this year, and has been grappling with the risks mentioned above for several years, but all of these concerns still bear close monitoring.

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